President Fisher is confused. From Reuters

Dallas Fed President Richard Fisher, an outspoken policy hawk, added that he was perplexed by Wall Street’s continued preoccupation with the possibility that the Fed could engage in a third round of large-scale buying of assets, known as quantitative easing, or QE3.

Drawing a line in a debate that has intensified this year, Fisher said he would support QE3 only if there were "a significant reversal of the current momentum of the economy (or) significant deflation," among other scenarios, adding: "I don’t see that happening right now."

This is quite the co-incidence.

As it happens, just this morning I was perplexed at how in the face of massive on-going policy failure by virtually any standard whatsoever anyone at the Fed could even consider retracting monetary accommodation or signaling a more contractionary stance.

Fortunately, the Regional President cleared that up for me

"(I)f the data continue to improve, however gradually, the markets should begin preparing themselves for the good Dr. Fed to wean them from their dependency rather than administer further dosage," Fisher said, using a familiar metaphor.

Now I understand. The President is saying that because markets are pricing in a zero real interest rate, he himself now has absolutely no concern for how long it takes to alleviate the suffering of millions of people under the Fed’s charge. Time, you see, is of no value.

His devotion to market signals is extraordinary.